2. Research Your Market

Market research is an essential first step in shaping your business plan.

When you do market research, you learn about your potential customers in order to reach,connect with, and sell to them.

Your target market is the group of people most likely to buy your company’s productsor services.

Understanding who and where they are and how they make purchasing decisions will help youcreate a sound business plan and position your business for success.

In this video, you will conduct research to identify your target market.

You will take notes and organize your research in a document, so you can access it easilywhen you write your business plan.

To begin, click on the browser tab with your document.

Then, add a heading for your business idea.

Write a few brief notes about your business and the products or services you plan to offer.

Don’t spend more than a few minutes on this.

You can add more details later.

Then, define the location -- or areas -- your business will serve.

This might be a neighborhood, city, or a larger area.

Next, add a heading for notes about your customers.

This information will come from your market research.

Add a subheading for the first type of customer information you will research: “market size.”

This is the number of individuals, households, or businesses that make up your target market.

Then, click on your search tab.

Use keywords about your business location to search for population statistics.

This will help you find out how many individuals, households, or businesses make up your target market.

Click on the tab for your notes document to take notes on the information you find.

Then, search for local demographics, such as information about the people in your target market’s:average age,gender, education,employment, marital status,and family sizeAdd a market demographics subheading to your document beneath market size.

Together, market size and demographics provide an idea of how many people live where youplan to open your business and what they’re like.

They also help you determine key market information, such as the number of households in your areaand income information for potential customers.

Continue your market research on your customers.

Add headings to your notes document for other categories you research, such as:Income, which includes the average household income of a consumer or the average revenueof a business in your location...

And purchasing habits, which is how much consumers typically spend on the productsor services you plan to sell, and how, where, and how often they buy them.

Add headings to your document to organize your market research in each category.

As you find information about each category, add it beneath the appropriate heading.

Hyperlink important information to the site where you found it.

A hyperlink connects text in your document to a website.

This way, you can easily find the website where information is located later.

To add specific or large amounts of information to your notes, copy text from your research tab.

Then switch to your notes tab, and paste the copied text into your document under the appropriate heading.

That way, you don’t have to type every word.

Reformat pasted text to match the formatting of your document.

Continue filling in your document until you have included details about each target marketresearch category, including: Customers,Market Size, Market Demographics,Income, And purchasing habits.

Then, move on to the next video to analyze your competition.

Now, it’s your turn: Add notes about your business idea,Search for target market information and add it to your notes,Organize your notes with headings, And hyperlink your notes to the websites where the information appears.